Paying Staff or Consultants

This solution is focused on small businesses and self-employed people. Larger businesses may need to deal with people differently.

You have some different options here based on your businesses financial situation. Depending on what options you have chosen from the Government you need to decide what is best for yourself, your staff and your business. This is NOT just a business decision. Every move affects someone's life.

You need to be honest with your staff/consultant/suppliers about whether you can keep them on or not. If you can't then they need to know sooner rather than later as they will have their own financial situations to sort.

If you owe them money from work previously carried out this money should be cleared first before making any further commitments that will take you further into debt. Before speaking to anyone;

  • Add up how much money you owe each person

  • Add up how many members of staff you have

  • Add up what you owe suppliers or other bills you need to pay

  • Work out the total amount of money you have spare right now to pay staff

  • Decide who you need to let go of and who you need to keep in order to keep your company going if you can.

Then speak to all of the staff/consultants individually to get an idea of their current situations as this will help you to know who to deal with first if you have to choose. Some of them may be O.K to wait until you help other people who need it more. By asking the following questions you will show them that you are thinking of them and trying to do your best to help them in this difficult time. Ask each one of them the following questions to help you better understand;

  • Do you have any other income right now?

  • What worries you the most about your situation?

  • How much are your basic rent or mortgage costs?

  • What other commitments do you have?

  • Is there anything you feel I can help you with?

Once you are clear on each person work out an amount that is suitable for each of them. Then send the following email.

EMAIL TEXT

Hello (INSERT THE NAME)

I hope this email finds you well and safe right now. I am writing to you about the money I owe you and the agreement we have in place.

As I'm sure you are aware, we are all under a very difficult financial situation right now as we discussed on the phone. I have been looking at what I can and can't afford right now. Currently, there is an outstanding balance of (INSERT THE AMOUNT) that is owed to you.

I can afford to pay you (INSERT THE AMOUNT AND DATE YOU CAN PAY IT) Regarding the rest of the money owed I will need to pay that in smaller amounts.

I can commit to paying you (INSERT THE AMOUNT) each (WEEK OR MONTH)

I do appreciate I need to clear the balance with you but I can't afford to pay it in full at this time and I am sorry for that.

If you need to let this person go then do so by a phone call if you can as it is far more personal, however, if you find it too hard then you could write and change the following text to suit your situation;

Please know that I am not trying to avoid paying you, I am just very aware that I need to be mindful of what I am spending right now to make sure I can keep myself afloat during the crisis.

Moving forward (INSERT THEIR NAME), I can't commit to any more work with you as I simply can not afford it.

However, if you are still looking for work and are willing to work with me in some capacity but at a lower rate then please know that I can afford (INSERT THE AMOUNT) and I would very much appreciate your support at this time.

Again, I am so sorry we are in this situation and I apologise for any inconvenience this has caused you, I just need to be honest with you so that you can attend to your own needs also.

By the way, if you are struggling with finances too then you may wish to check out this webinar I took part in. It's for personal and business finances and super simple. It really helps. 

Thank again and I look forward to hearing from you soon.

Stay safe.